Business Intelligence and Analytics Grow Up

Enterprises are adopting sophisticated business intelligence and analytics technologies and strategies to manage the enormous waves of data they receive and to establish a competitive advantage.

Finding the right information at the right time—and then putting it to work—has always been at the center of a winning business strategy. But in an era when organizations are awash in data, it’s challenging to manage data in a way that provides insights that lead to business success.

Business intelligence and business analytics are at the center of this universe. In recent years, BI and BA systems have become far more sophisticated and powerful. Used effectively, they can spot patterns and yield insights that would otherwise go undetected.

However, constructing the right architecture is no small feat—particularly as social networking and mobility enter the picture. “Data is available in ways that were unimaginable a few years ago,” says John Lucker, principal at Deloitte Consulting. “The challenge is putting it to use.”

Culling and crunching data across a far-flung enterprise requires sophisticated tools—particularly with the growth of unstructured data and the emergence of unconventional data sources. What’s more, there’s a growing need to involve line-of-business leaders and partners.

“Ideally,” says Kamlesh Mhashilkar, head of BIPM Services at Tata Consultancy Services, “an organization can use BI and BA at tactical, strategic and operational levels. When these systems are used effectively, they have the ability to transform an organization.”

Banking on Better Data

Although BI and BA have been around in one form or another for almost a quarter of a century—the concept actually dates back to IBM researcher Hans Peter Luhn in the late 1950s—the adoption rate for these tools remains relatively low. Industry studies report that only 10 to 20 percent of organizations tap into BI and BA in any significant way. Worse, many users face major hurdles in extracting meaningful information from these systems.

Yet, organizations that use BI and BA effectively frequently achieve clear-cut benefits that have an impact on the bottom line. Financial services firms analyze accounts for signs of customers who seem likely to change banks or credit card providers. Hospitals plug in epidemiological data and overlay it with internal data points in order to identify patients who are at greater risk of complications or death.

Manufacturers and retailers use mashups, social media data and clickstream analysis to better understand customer segments and determine how different groups influence others. This can guide everything from customer service to marketing.

Growing interest in BI and BA is no accident. Lower-cost hardware and software—combined with better ways to capture, manage and manipulate data—have created a “perfect storm,” Deloitte’s Lucker observes. “Companies have an opportunity to close the gap on inefficiencies and suboptimal processes. They’re able to substantially boost their return on technology and business investments.”

It’s an opportunity that Deutsche Postbank AG, a London-based branch of the German banking giant, wasn’t going to pass up. The U.K. office, which focuses on private, business and corporate clients, requires accurate and timely management reports to guide investments.

In the past, the bank had to assemble reports from a disparate array of systems and sources. “We had silos of data and no effective way to connect them,” says Clarel Sookun, a director and head of IT. “Various attempts to streamline reporting and data analysis weren’t effective.”

To fix the problem, the bank turned to IBM Smart Analytics in September 2010. The appeal of the BA solution, Sookun explains, is that it offered a way to fully integrate a diverse array of data elements in real time.

Now, instead of it taking hours or days to prepare a report, bankers have the information they require at their fingertips. They can drill down through investment portfolios and view results by divergent criteria and variables. The system has also boosted reporting accuracy, providing a way to reconcile data on the fly.

Having achieved success in the initial phase of business analytics, the bank is looking to expand the capabilities to aid finance operations by analyzing loan and interest data and performing what-if scenarios using a graphical interface. It also aims to ratchet up management reporting tools so executives can gain a more comprehensive view of various metrics.

“There are enormous long-term benefits,” Sookun notes. “We can view how a change in basis points—or a series of changes—affects the business, or how buying or selling assets impacts the bottom line.”

Tata’s Mhashilkar says that organizations are increasingly connecting data from different systems and repositories in order to spot relationships that previously eluded the radar. “The key to building BI and BA systems that offer a competitive advantage is moving beyond data marts and islands of information,” he says.

“It’s all about connecting data that resides in different departments—including human resources, finance, manufacturing, marketing, customer support and others. With everything visible in one place, it’s possible to gain a single snapshot and know what is happening across the organization in real time.”

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